Académique Documents
Professionnel Documents
Culture Documents
IAS 2 standard
Documentation
Goods received notes On transfer from the receiving bay to the warehouse, the warehouse
clerk will sign the goods received note which was issued when the supplier delivered the goods.
Material requisition, material issue note Requests the warehouse to release material or
components to the production section and issue note records the issued materials to the
production
Costing schedule Identify and quantify all cost which it is anticipated will be incurred in the
manufacturing process
Manufacturing or production schedules Notifies the production\manufacturing department as
to what is to be produced
Job card Tracks stages of production for a specific job. As costs are accumulated e.g. raw
materials used, labor hours expended, they are recorded on the job card.
Production report Used to record the result of production, output, and wastage loss.
Transfer to finished goods note Records the transfer of manufactured goods from
manufacturing department into finished goods stores
Picking slip Used to select goods ordered from the stores
Inventory sheet Used during the inventory count. Contains a description of inventory, its
location in stores, and column into which the counted inventory can be entered
Inventory tag A numerically sequenced cardboard tag, which is attached to different types of
inventory before an inventory count.
Inventory Adjustment form Is a sequenced document which is used to record adjustments
which must be made to correct the perpetual inventory records when actual inventory and
theoretical inventory do not agree.
Controls relating to the warehouse: Movement of goods and components and finished goods
Controls
Risks
No movement of inventory without
Goods received from the supplier are not
authorizing document
transferred timeously or at all
No movement of inventory should take
Inventory stolen or lost
Inventory deteriorates in value due to
place without being recorded
Whenever there is movement between
inadequate controls or its nature
No record is made for removed inventory
sections, both the deliver and the receiver
Inventory shortages are concealed
should acknowledge the transfer e.g.
Too much inventory produced
signing after having checked the quantity
The goods or components issued are
and quality of the items being transferred
incorrect resulting in lost sale or
against the source document
Documents should be sequentially and
production delays
numerically filed
Documents must me sequenced checked
and missing documents investigated
Physical controls
Substantive procedures
Initial Procedures
Inspect the supplier contact for any inventory purchase on monthly basis agreement if has
been recorded
Inspect minutes of meeting of directors for any planned inventory purchase
Inspect inventory budgets for budgeted inventory budgets
Perform analytics on cost of goods sold to determine if significant fluctuations exist that
would necessitate an audit investigation
Obtain a listing of imported inventory in transit at financial year end and inspect relevant
orders/contract as to whether the ownership has passed to the client have been recorded
Enquire from management if there is inventory held at third party locations and Inspect
that it is included in the year-end inventory
If any, inspect that any inventory held at third party locations are included in the year-end
inventory
Assertion Existence
Trace a selected items from managements count records to the physical inventory for
physical existence
If any, inspect that inventory billed and not delivered is not included in the year-end
inventory figure
If any, inspect that inventory held for third parties are not included in the year-end
inventory figure
Assertion Presentation and disclosure
Inspect the financial statements disclosures and consider:
o They are disclosed in accordance with IFRS
o They are consistent with evidence gathered during the audit
o The wording of disclosure is clear and understandable
o Any classification of information is disclosed is appropriate